Numerous studies have shown that diversity has an impact positive on board performance. Diverse people can bring different perspectives, experiences, and angles of approach to a problem. This can lead to solutions which are otherwise missed by an homogenous board. This is particularly applicable to boards that contain members of underrepresented groups. They will gain a better understanding of the preferences and cultures of these groups, which can help them serve these groups better as clients.
The diversity of backgrounds and experiences on a board may improve morale and strengthen trust. If board members believe that their opinions and experiences are being heard they are more committed to the success of the business. This is why it’s important to keep track of your board’s progress in promoting diversity and to pinpoint any obstacles that need to be addressed.
Another area where diversity can help is in managing risk. A recent study by Berger et al. discovered that a the greater diversity of gender and age on the board results in better risk management for operational risks and a less heightened risk of market risk. The study also shows that however, that high levels www.boardroomsales.com/how-vdr-provides-an-encrypted-environment-for-storing-confidential-business-information/ of diversity on the board could cause problems in communication and cohesion.
Lastly, boards with a diverse membership are more aware of the unique challenges faced by underrepresented communities which can push them into action to promote social responsibility and ethical conduct in their businesses. It is essential to continue to attract and search for talented women, people with diverse backgrounds and LGBTQ candidates to fill the board positions.
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